Adani Group, the second largest cement producer in India, announced in a statement on Sunday that it has bought a majority stake in Holcim AG's cement assets in India in a $10.5 billion deal.
Gautam Adani, Asia's richest man, bought 63.19 percent of Ambuja Cements Ltd and its subsidiary ACC after a bidding war with local enterprises. Holcim's divestiture is the latest step in its effort to lessen its reliance on cement manufacture, an industrial process that emits high amounts of carbon emissions and has thus turned off many environmentally aware investors.
In recent years, the Swiss firm has stepped up its attempts to exit the carbon-intensive cement industry. Ambuja and ACC have a combined capacity of at least 70 million tonnes of cement per year, which is second only to UltraTech Cement's 120 million tonnes. The Adani family had entered into definitive agreements for the acquisition of Holcim Ltd's full shareholding in Ambuja and ACC through an offshore special purpose entity, the Adani Group said in a statement.
Holcim stated in a statement that the Adani Group had signed a binding deal to buy Holcim's Indian business, which includes its share in Ambuja Cement, which owns a 50.05 percent stake in ACC, as well as its 4.48 percent direct stake in ACC. The interests would be worth about $6.4 billion to Holcim. The Adani Group said that it would make an open offer to buy more shares. Holcim expects the purchase to finalise in the second half of 2022.
Adani Enterprises Ltd, the flagship company of the Adani Group, includes two cement companies. According to an Adani group executive, the company aims to establish an integrated complex in western Gujarat and Maharastra states. Ambuja Cement employs 4,700 people across 14 cement mills. ACC employs 6,000 employees and operates 17 cement facilities and 78 ready-mix concrete factories. According to official sources, the recent disposal is the largest since Holcim joined with French rival Lafarge in 2015.
Since then, the company has been selling off non-core aspects of its operations in order to focus on North America and Europe. The business sold its Brazilian division for $1.025 billion last year, as well as its operations in the Philippines and Indonesia.Also Read : Wheat procurement in six states has been extended until May 31